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AMENDED IN SENATE MAY 10, 2011

SENATE BILL No. 550

Introduced by Senator Padilla(Coauthor: Senator Price)

(Coauthors: Assembly Members Blumenfeld, Butler, Gatto, andHagman)

February 17, 2011

An act to amend Sections 21800, 21804, 21805, and 21806 of, to addSection 21807 to, and to repeal and add Sections 21801, 21802, and

21803 of, the Business and Professions Code, relating to business.

legislative counsels digest

SB 550, as amended, Padilla. Business: manufactured optical disc.Existing law requires every person who manufactures an optical disc,

as defned, for commercial purposes to permanently mark themanufactured optical disc with an identifcation mark or a uniqueidentifying code, as specifed. Existing law sets forth various defnitionsfor purposes of these provisions. Existing law makes a manufacturerthat violates these provisions guilty of a crime punishable by specifedfnes. Existing law also makes a person that engages in specifedprohibited acts in violation of these provisions guilty of a crimepunishable by specifed fnes or imprisonment.

This bill would recast the defnitions applicable to these provisions.The bill would prohibit a person who manufactures optical discs forcommercial purposes from possessing, owning, controlling, or operatingmanufacturing equipment or any optical disc mold unless it has beenadapted to apply the appropriate identifcation mark or uniqueidentifying code. The bill would prohibit a person who manufacturesoptical discs for commercial purposes from making, possessing, or

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adapting any optical disc mold for the purpose of applying a forged,false, or deceptive identifcation mark or identifying code. The billwould authorize law enforcement offcers to perform inspections, asspecifed, at commercial optical disc manufacturing facilities duringregular business hours without a warrant for the purpose of verifyingcompliance with these provisions and would authorize law enforcement

offcers, in performing these investigations, to seize any optical disc orproduction part manufactured in violation of these provisions. The billwould require a person manufacturing optical discs for commercialpurposes to maintain specifed records. The bill would also increasethe fnes applicable to a manufacturer or person that violates theprovisions regulating manufactured optical discs.

Because a violation of the bills provisions by a person whomanufactures optical discs would be a crime, the bill would impose astate-mandated local program.

The California Constitution requires the state to reimburse localagencies and school districts for certain costs mandated by the state.Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this actfor a specifed reason.

Vote: majority. Appropriation: no. Fiscal committee: yes.State-mandated local program: yes.

The people of the State of California do enact as follows:

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SECTION 1. Section 21800 of the Business and ProfessionsCode is amended to read:

21800. (a) Every person who manufactures an optical disc forcommercial purposes shall permanently mark each manufacturedoptical disc with an identifcation mark that identifes the name ofthe manufacturer and the state in which the optical disc wasmanufactured or, alternatively, a unique identifying code that willallow law enforcement personnel to determine the name of themanufacturer and the state in which the optical disc wasmanufactured.

(b) The identifcation mark required by this section shall beaffxed by molding, diestamping, etching, or other permanentmethod in a manner in which it is clearly visible without the aidof magnifcation or special devices to read the mark.

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SEC. 2. Section 21801 of the Business and Professions Codeis repealed.

SEC. 3. Section 21801 is added to the Business and ProfessionsCode, to read:

21801. (a) No person who manufactures optical discs forcommercial purposes shall (1) possess, own, control, or operate

manufacturing equipment or any optical disc mold unless it hasbeen adapted to apply the appropriate identifcation mark or uniqueidentifying code in accordance with this chapter, or (2) make,possess, or adapt any optical disc mold for the purpose of applyingto an optical disc a forged or false identifcation mark or identifyingcode, or any mark so similar to a manufacturers identifcationmark or identifying code as to be likely to deceive.

(b) Any manufacturing equipment, optical disc mold, orproduction part found on the premises of a commercialmanufacturer shall for the purposes of this chapter be deemed tobe in the possession of the manufacturer.

SEC. 4. Section 21802 of the Business and Professions Code

is repealed.SEC. 5. Section 21802 is added to the Business and Professions

Code, to read:21802. For purposes of this chapter, the following terms shall

have the following meanings:(a) Commercial purposes means the manufacture of at least

10 of the same or different optical discs in a 180-day period bystoring information on the disc for the purposes of resale by thatperson or others.

(b) Manufacturer means a person who replicates the physicaloptical disc or produces the master used in any optical discreplication process. It does not include a person who manufacturesoptical discs for internal use, testing, or review, or a person whomanufactures blank optical discs.

(c) Manufacturing equipmentmeans any machine, equipment,or device, including mastering equipment, used for the manufactureof optical discs or production parts in accordance with this chapter.

(d) Mastering equipment means any machine, equipment, ordevice used for the mastering of optical discs or production partsconsisting of a signal processor and laser beam recorder or anyother recorder, used to record data onto the glass or polymer master

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disc from which production parts are produced, or to record datadirectly onto a production part.

(e) Optical disc means a disc capable of being read by a laseror other light source on which data is stored in digital form. Itincludes, but is not limited to, discs known as CDs, DVDs, orrelated mastering source materials. It does not include blank optical

discs.(f) Production part means the item usually referred to as a

stamper that embodies data in a digital form and is capable of beingused to mold optical discs, and includes any other item, usuallyreferred to as a master, father or mother, embodying data fromwhich a stamper may be produced by means of an electroplatingprocess.

(g) Professional organization means an organization whosemembership consists wholly or substantially of intellectual propertyrights owners, and which is mandated by those members to enforcetheir rights against counterfeiting and piracy.

SEC. 6. Section 21803 of the Business and Professions Code

is repealed.SEC. 7. Section 21803 is added to the Business and Professions

Code, to read:21803. (a) Law enforcement offcers are authorized to perform

inspections at commercial optical disc manufacturing facilities toverify compliance with the provisions of this chapter. Anyinspection may be carried out with the assistance of a professionalorganization designated by law enforcement shall be conductedby offcers whose primary responsibilities include investigationof high-technology crime or intellectual property piracy.Inspections shall take place during regular business hours and shallbe limited to the areas of the premises where manufacturingequipment is located and where optical discs and production partsare manufactured and stored. The scope of the inspection shall berestricted to the physical review of items and collection ofinformation necessary to verify compliance with the provisions ofthis chapter. Offcers performing inspections may do so withoutproviding prior notice or obtaining a warrant, and shall have theauthority to do all of the following:

(1) Take an inventory of all manufacturing equipment, includingthe identifcation mark or unique identifying code that any pieceof equipment has been modifed to apply.

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(2) Review any optical disc, manufacturing equipment, opticaldisc mold, or production part.

(3) Review any record, book, or document maintained underSection 21807, kept in any format, electronic or otherwise, relatingto the business concerned.

(4) Inspect, remove, and detain for the purpose of examination

for as long as reasonably necessary any optical disc, productionpart, or record, book, or document maintained under Section 21807.

(5) Seize any optical disc or production part manufactured inviolation of this chapter.

(6) Obtain and remove four samples each of the optical discsmolded by each mold that has been used or could be used tomanufacture optical discs.

(b) No person shall evade, obstruct, or refuse any inspectionrequested or being carried out by a law enforcement offcer todetermine compliance with this chapter. The manufacturer, andthe employees, servants, or agents of the manufacturer, shallcooperate during the course of the inspection by promptly doing

all of the following:(1) Providing and explaining any record, book, or document

required to be maintained pursuant to Section 21807.(2) Pointing out and providing access to all optical discs,

manufacturing equipment, optical disc molds, and production partsand demonstrating to the satisfaction of the offcer that they includeor have been adapted to apply the required identifcation mark orunique identifying code.

(3) Providing and permanently surrendering four samples eachof the optical discs molded by each mold that has been used orcould be used to manufacture optical discs.

SEC. 8. Section 21804 of the Business and Professions Codeis amended to read:

21804. Except as otherwise provided in this chapter, anymanufacturer of optical discs who violates this chapter is guiltyof a misdemeanor, and shall be subject to a fne of not less thantwo thousand fve hundred dollars ($2,500) and not more thantwenty-fve thousand dollars ($25,000) for afrst offense, and shallbe subject to a fne of not less than twenty-fve thousand dollars($25,000) nor more than two hundred ffty thousand dollars($250,000) for a second or subsequent offense.

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21805. Any person who buys, sells, receives, transfers, orpossesses for purposes of sale or rental an optical disc knowingthat the identifcation mark required by this chapter has beenremoved, defaced, covered, altered, or destroyed, or knowing it

was manufactured in California without the required identifcationmark, or knowing it was manufactured in California with a falseidentifcation mark is guilty of a misdemeanor punishable byimprisonment in a county jail for a term not exceeding one year,or by a fne of not less than one thousand dollars ($1,000) nor morethan ten thousand dollars ($10,000), or by both the fne andimprisonment.


21806. Any person who knowingly removes, defaces, covers,alters, or destroys the identifcation mark required by this chapteris guilty of a misdemeanor punishable by imprisonment in a county

jail for a term not exceeding one year, or by a fne of not less thanone thousand dollars ($1,000) nor more than ten thousand dollars($10,000), or by both the fne and imprisonment.

SEC. 11. Section 21807 is added to the Business andProfessions Code, to read:

21807. (a) Every person who manufactures optical discs forcommercial purposes shall keep full and accurate records of itsmanufacturing equipment, and shall make them available to lawenforcement for inspection pursuant to this chapter. The recordsshall include a current inventory of manufacturing equipment, andevery purchase, lease, sale, disposal, or other transaction relatingto any manufacturing equipment, specifying the make, model, andserial number of the equipment, the identifcation mark or uniqueidentifying code which the equipment has been adapted to apply,the date and nature of each transaction, and the full name andaddress of the party with whom the transaction was entered into.

(b) Every person who manufactures optical discs for commercialpurposes shall keep all of the following, for a period of not lessthan fve years from the date of production:

(1) One sample of each optical disc title manufactured by it.(2) One copy in a retrievable form of the content of each

production part manufactured by it.

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(3) The name and physical address of the customer, or if theorder was placed by an intermediary, the name and physical addressof the actual customer who originated the order.

SEC. 12. No reimbursement is required by this act pursuant toSection 6 of Article XIIIB of the California Constitution becausethe only costs that may be incurred by a local agency or school

district will be incurred because this act creates a new crime orinfraction, eliminates a crime or infraction, or changes the penaltyfor a crime or infraction, within the meaning of Section 17556 ofthe Government Code, or changes the defnition of a crime withinthe meaning of Section 6 of Article XIII B of the CaliforniaConstitution.

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